12 Most Compelling Reasons to Turn Competitors into Partners

12 Most Compelling Reasons to Turn Competitors into Partners

For as long as I can remember, I’ve been taught that business is about competition. Companies fight over the same customers like two warring nations fighting over the same piece of land. It’s a zero–sum game. If you gain a customer, I lose a customer. If I gain a customer, you lose a customer. So, whoever puts up the biggest fight wins and to the victor goes the spoils. That’s the traditional way of doing business.

I’m not entirely sure that’s the best approach to take. If you view yourself as fighting over the same customers as your competitors, it simply means you have not differentiated yourself enough. If you and your competitor have the same customers, it means you are selling the same thing. You are a commodity. If you differentiate, then you aren’t fighting anymore. You’ve transcended competition and set yourself up as something else entirely. This approach, I believe, is what companies should strive for.

So, if you are doing something differently and your competitors are doing something differently, you each are going after different customers. You do some things better and your competitor does some things better, so you specialize. But your customers don’t know the difference. They might go to your competitors and, likewise, your competitors’ customers might come to you. Why not form an alliance and send the right customers to the right place? Why not work together?

I think cooperating and collaborating with your competitors is the best way to achieve the greatest results for everyone. Remember that concept of “sharing” we learned about in Kindergarten? I think it might have some powerful application to the business world of today. Here’s why…

1. There’s plenty of money to go around

There are as many customers as there are needs. It isn’t a zero-sum game because any one customer has a variety of ever-evolving needs to be satisfied. If you can help a customer, that doesn’t necessarily mean that a competitor cannot also help her. Don’t be fooled by rhetoric about scarcity. The possibilities of creating value are endless.

2. You won’t have to cut prices

The reason why your prices are often forced below what you would like them to be is because you are competing with someone else selling the same thing to the same people. If both you and your competitor focus on the best value that you can create instead of striving for the same middle-of-the-road mediocrity, you’ll each get the right customers without having to lower your prices to get them.

3. You’ll transcend “Me-Too” philosophy

Competition does not lead to innovation—resistance. Competition leads to innovation. It’s only when you refuse to compete, and instead choose to do something differently, that you force yourself to come up with something innovative. If you are focusing on your greatest strengths and your competitors are focusing on their greatest strengths, you’ll each be doing your best work instead of trying to mimic one another.

4. You’ll pay more attention to your customers

Cut-throat competition often leads companies to ignore their customers. Like politicians in a heated campaign, you’re more worried about slinging mud at the opposition than you are about solving the problems of the people you are working for. With competition out of the way, you’ll be able to focus exclusively on your customers.

5. A referral from a competitor is more valuable than anything

If you partner with your competitors, you’ll get customers sent to you from your competition when you are better suited to help those customers. Imagine being that customer. You go to a company for help and that company sends you to someone it competes with to better address your issue. It’s like a general physician sending you to a specialist—you’ll be confident with where you end up.

6. You’ll get better at what you do

When you are free to focus on your greatest strengths, you’ll improve your core competencies. Focusing on your niche, you’ll become better at serving those core customers. When you are trying to compete for a variety of customers, you often spread yourself too thin and end up diluting your brand. Partnering with competitors will enable you to get better at being you.

7. Employees feel less threatened

Employees, especially your salespeople, are often threatened by the competition. They see competitors as enemies and have trouble treating them with civility when interacting with customers. When you partner with competitors, you will create a more positive and supportive culture with your employees.

8. Customers will be willing to pay more

Not only will you be able to refrain from cutting prices, you’ll probably be able to raise them. You’ll be meeting more specific, qualified needs. You’ll be providing your customers exactly what they want instead of something that they simply settle for. And, if it’s worth enough to them, they’ll be willing to pay more for it.

9. You’ll acquire the right customers for your business

Who hasn’t had a difficult customer? Much of the time, the customer isn’t really a bad person. They just have unmet expectations. They aren’t the right customer for you. When you partner with your competitors, you’ll be able to send the customers to the appropriate company that will help them best solve their problems. You’ll get the right customers for your business and your competitors will get the right customers for theirs.

10. You’ll Expand Your Professional Network

You have your set of connections and your competitors have theirs. When you work together, you’ll be introduced to one another’s networks. Your professional connections will grow exponentially. New doors of opportunity may open that you never thought possible.

11. Your customers will trust you more

Getting a referral from a competitor is nice, but imagine what the customer will think of your honesty and integrity when you are the one that refers them to a competitor. If you are willing to send the customer to another company to better suit their present needs, you better believe that you’ll be the first one they come to for their future needs.

12. It just feels better

Okay, so maybe not all business people have quite the sensitive conscience that I do. But I don’t think anyone likes to see others fail. Sportsmanship in business, I think, is admirable. Helping out competitors just makes you feel like a more decent human being. When you compete, you let your customers fall and leave them in the dust behind you. When you partner with your competitors, you are helping them up so that you may both finish the race together.

What do you think? Am I off my rocker? Is this some Utopian fantasy? Or is competition just something we force ourselves into due to our inability to set ourselves apart? Can collaboration ultimately replace competition? What are your thoughts?

Image courtesy of clintnosleep licensed via Creative Commons

Doug Rice


Douglas E. Rice is a marketer, writer, and researcher who blogs regularly. He is the author of The Curiosity Manifesto, a provocative guide to learning new things and keeping an open mind.

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You are so on target, the key is getting folks out of their fear-mode to think form a collaborative perspective.


I love the fact that you point out you do not want to simply become a commodity. Because then it just becomes a "who's price is lowest". We somehow have to promote our value and innovation. However, I think we will always have competitors, and it will be rare that we partner with them. I know I've entered informal partnerships in good faith -> and invariably paid for giving that trust.

Stick to offering value, innovation, service, courtesy, integrity -> and then beat your competitors fair and square regardless of their tactics. And don't be like the sprinter always looking behind him to see if the competitor is catching up. Take the occasional benchmark on where your competitors are, and then get back to focusing on being the best you can be!


Diversity breeds innovation and that is why the free market works. It gives consumers options. Two companies in the same sector will do business differently & with different core values. I can see the value of collaboration with a competitor to bring something new to the market.

I bet at least a few Pepsi & Coke executives are friends. Or maybe it is my naive hope that no more casualties will be lost in the cola wars.


Interesting POV Doug. Sorta counterintuitive to our dog-eat-dog capitalist economy tho?


@dbvickery "I know I've entered informal partnerships in good faith and invariably paid for giving that trust." Yeah, it's definitely tough when you get burned. It's a classic prisoner's dilemma. We'd both be better of partnering but, we'd each be even better of having ALL the business, so extending trust is incredibly risky.

I would argue that, the more you benchmark yourself against competitors, the more you are necessarily focusing on price. If you think of yourself as competing with another, then you are offering a similar product/service. The only way to be competitive in that position is to lower your price. When you sell something entirely different (from your perspective), you are no longer competing. You're offering your customers something different entirely. That, I think, is the route to go.

Thanks for the comment, Brian!


@susansilver thanks Susan! "Diversity breeds innovation." That's my point exactly! If two companies are differentiated, they aren't really competing--they're opting to play different games entirely. And that's, I believe, what drives progress--resisting commoditized competition.


@samfiorella thanks Sam. Yes, counterintuitive is my way. I think Capitalism is evolving and competition isn't what it used to be.